MSC announces new bunker surcharge to cover sulphur fuel costs

MSC announces new bunker surcharge to cover sulphur fuel costs

Mediterranean Shipping Company (MSC) has joined its rivals Maersk Line and CMA CGM in announcing a new bunker fuel surcharge to be imposed on its customers to help recover additional costs associated with the 2020 global sulphur cap.

Starting January 1, 2019, new International Maritime Organization rules will require ships to use bunker fuel with a maximum sulphur content of 0.5%, compared with the current standard of 3.5%, unless they are equipped with so-called scrubbers to clean up sulphur emissions.

In order to prepare for the new rules, MSC announced Monday it will be introducing a new Global Fuel Surcharge as of 1 January 2019 in order to help customers plan for the impact.

MSC said it expects operating costs to rise in excess of $2 billion dollars per year as a result of the new rules.

“The new MSC Global Fuel Surcharge will replace existing bunker surcharge mechanisms and will reflect a combination of fuel prices at bunkering ports around the world and specific line costs such as transit times, fuel efficiency and other trade-related factors,” MSC said in a press release.

MSC’s announcement follows similar moves by Maersk Line and CMA CGM.

On Monday, CMA CGM said the global sulfur cap is expected to cost customers an estimated $160 per TEU on average, which will be “taken into account through the application or adjustment of fuel surcharges on a trade-by-trade basis.”

Last week, Maersk revealed a similar bunker surcharge to help cover the estimated $2 billion per year bump in fuel costs associated with the rules.

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